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Staff Coordinator: Gregory Pfost, AICP, Deputy Planning Director
1) Consider proposals from parties that have submitted statements of interest and allow for public comment; 2) If the Council is inclined to move forward with a specific development proposal, provide direction to Standard Pacific to submit the necessary development applications and begin the public review process; and 3) If a decision is given to move forward with a specific proposal, consider studying appropriate uses for the expenditure of accumulated RDA set-aside funds.
On May 7, 2002, the City Council, Planning Commission and Finance Advisory Committee held a joint workshop to discuss various issues pertaining to the City's obligations to provide affordable housing, and the future of vacant land located on Crestridge Road. In addition to hearing general public comment, the Council, Commission and FAC also heard presentations from six different parties expressing an interest in the development of the Rancho Palos Verdes Redevelopment Agency's (RDA) vacant parcel located at the corner of Crestridge Road and Crenshaw Boulevard.
At that meeting, the City Council gave general direction to Staff to create a matrix addressing issues, such as providing affordable housing units and the expenditure of the City's affordable housing funds, while incorporating a comparative analysis of the various development/use options that are available for the subject site. Additionally, the Council requested that Staff also discuss the expenditure of affordable housing funds, use of the RDA owned property, consequences of taking or not taking certain actions, pros and cons of each alternative and a summary of constraints.
At the May 7th meeting, some Members of the City Council expressed the view that a joint use option, considering a combination of uses on the City property, or on the City property and the neighboring vacant property, might be an option that should be explored. In August 2002, Standard Pacific, which controls the vacant parcel adjacent to the RDA owned parcel, submitted a preliminary proposal (attached white notebook) that would combine the City's parcel with its parcel for the construction of a Senior Housing project, a public park site with pedestrian trails, and a Senior Center. To ensure that all of the six parties that spoke at the May 7th meeting had an equal opportunity to present information and that all viable options could be discussed, Staff contacted the other parties to determine if they too had additional information to submit. Attached are additional letter from the P.V. Art Center, the Peninsula Seniors, and Affirmed Housing Group.
Additionally, Attachment 3 provides a detailed background discussion pertaining to the "Description, Zoning and Existing Land Uses Along Crestridge Road" as well as the "History of the two Un-entitled Vacant Parcels"
Affordable Housing Obligations:
In discussing the alternative uses for the Crestridge properties, it is important to have an understanding of certain background issues that may affect any decisions regarding these properties, specifically, in regards to the City and RDA's obligations towards affordable housing. At the May 7th meeting, the Council requested that Staff identify the requirements posed upon the City and RDA and identify the consequences for not following through with those requirements. Below, Staff has provided a summary table listing all of the dates that the Council should be aware of as it pertains to the City's Housing Element Obligations, RDA set-aside fund program, and the City's in-lieu fee program. Attachment 1 provides a more detailed explanation of each of these actions and programs.
Statements of Interest:
At the May 7th meeting, the Council, Commission and FAC heard from the Palos Verdes Art Center, Standard Pacific, Exceptional Children's Network, Corporation for Better Housing, Affirmed Housing Group and the Peninsula Seniors. Since the meeting, Staff has received the attached additional information from the Palos Verdes Art Center, Standard Pacific, the Peninsula Seniors, and Affirmed Housing Group. Each of the six conceptual proposals is described below. Below each proposal description, in table format, Staff has identified the process for development of each project, and the pros and consequences associated with each project. At the September 17th City Council meeting, Staff recommends that a representative from each of the interested parties be permitted to give a brief presentation.
Palos Verdes Art Center
As shown in the attached August 29, 2002 letter, the Palos Verdes Art Center would like to construct a facility of approximately 30,000 square feet with associated parking. In addition to the facility, their general development scheme would also include a public park area and trails connecting to Indian Peak Road and the Norris Pavilion below. Further, they believe that there is also enough room to accommodate a space for a senior center and affordable housing units. The property would need to be purchased from the RDA by the Art Center. Staff assumes that the Peninsula Seniors would have to contribute financially towards their space on the property, and that the City would use its in-lieu funds and/or RDA's set-aside funds towards the costs of developing the affordable units.
Exceptional Children’s Network
The Exceptional Children’s Network, a non-profit organization, is interested in developing an educational facility for learning disabled, and gifted and talented children on the Crestridge site. Their Statement of Interest described a "purchase" of the property. It is not clear what type of traffic this potential use would generate, nor is it clear how large a building would be required to accommodate the school. No additional information was submitted beyond their initial statement of interest letter.
As shown in the attached white notebook, Standard Pacific would propose combining their neighboring 9.77 acre lot with the RDA lot for the development of an 111 unit "for sale" (condominium) project age restricted for senior citizens. The proposal includes affordable housing units, a separate lot for the Peninsula Seniors to construct a Senior Center, and a public park/trails. Standard Pacific estimates approximately 150,000 cubic yards of grading.
This proposal will require approval of a General Plan Amendment, Zone Change and/or Zone Text Amendment due to the "for-sale" condominium use. As noted in Attachment 3, the Director made a decision that condominiums are not consistent with the Institutional zone. If the Council agrees with this determination, there are a number of options that could be considered to permit this type of use on this property. These options range from a General Plan Amendment/Zone Change (GPA/ZC) that would change the Institutional land use designation under the residential units to Multi-Family Residential, to a Zone Text Amendment (ZTA) that would adjust the text of the Institutional zone to accommodate a use such as this that serves seniors (similar to the existing permitted Institutional use of "homes for the aged"), provided that a number of services (yet to be determined) are included with the project consistent with other institutional land uses. The GPA/ZC or the ZTA option could be an entitlement requirement of the project, or initiated by the City Council. Staff recommends that this issue be reviewed during the entitlement processing of the proposed project if Standard Pacific is the selected alternative.
As noted in the attached letter, dated August 15, 2002, given that Standard Pacific will donate a portion of their property to the Peninsula Seniors for the development of a Senior Center, the Peninsula Seniors concur with the Standard Pacific proposal. The Peninsula Seniors indicate that they would like to construct a building in the range of 10,000-12,000 square feet plus parking.
As shown in the attached September 6, 2002 letter, the Peninsula Seniors have also expressed that although the Standard Pacific is their first choice, if the Standard Pacific proposal is not approved, then they would be interested in developing a Senior Center on the RDA Property. It is unclear as to whether the Peninsula Seniors would also provide affordable housing units and/or public park/trails. The table below reflects the Peninsula Seniors' interest in the RDA parcel only.
Affirmed Housing Group
City Staff invited Affirmed Housing Group to evaluate the possibility of an affordable senior housing project that would recognize the issues raised by the adjacent neighborhood including traffic, building mass and preservation of open space. The Affirmed Housing Group corroborated Corporation for Better Housing’s assertion that for on-site management of senior affordable rental units, the number of units could not be much below 50. However, they did indicate that if the City wanted only five affordable units, designed to complement the existing nearby neighborhood and to preserve some of the open space, it could be accomplished. The only limitation is how much money the City is willing to invest to build and manage five or more affordable units.
Corporation for Better Housing Proposal
The Corporation for Better Housing/Indian Ridge Crest Gardens’ proposal for approximately 40-42 condos or 52 apartments is still on the table.
Similar to the Standard Pacific proposal, this project would also require approval of a General Plan Amendment/Zone Change or a Zone Text Amendment if condominiums were proposed. Please see discussion of Standard Pacific's proposal on Page 5 for options related to the change in land use.
City View Park
A passive park with trails, a viewpoint and possibly points of interest similar to those in the Lower Hesse Park Trails could be designed for this site. Assuming no parking or restroom facilities were added, such a park could be developed for less than $100,000 (plus $702,392 for the land plus interest). Minimum irrigation and planting is assumed.
Do Nothing Alternative
A final alternative is to continue to hold the property in its present form and leave the decision for its best use to a time after all City property and needs have been studied and evaluated. This decision could occur during or at the end of the General Plan update process, or in 2004. The advantage to this approach is that the City will continue to be consistent with its adopted Housing Element and with the requirement to keep its Housing set-aside fund balance below one million dollars. If, by pursuing this alternative, the City does not meet its housing need of 13 new affordable housing units by year 2005, then the next Housing Element revision, expected in year 2005, will need to address why the City did not meet its need and what programs the City will use for the next 5 year planning period. Additionally, as noted earlier in this report, the Agency should decide whether to develop an affordable housing project on the property prior to 2005 (5 years after property purchase).
Selection of Specific Proposal:
There are many issues pertaining to the subject properties and the expenditure of City and RDA funds. Attachment 1, as requested, is a table/matrix that compares each of the alternatives to each other in relationship to the various issues.
Based upon the information shown in this report, the comparison of alternatives (Attachment 1), and the affordable housing related time constraints identified in the "Background" discussion above and detailed in Attachment 2, Staff feels that if the Council is inclined to move forward with a specific development proposal that the Standard Pacific alternative may be the most advantageous proposal. It provides the variety of uses that the Council identified at the May 7th workshop, such as a Senior Center site, affordable housing units, and a public park/trails on the corner lot thereby reducing the related development impacts to the corner of Crestridge Road and Crenshaw Boulevard. Further, if the City desires, funds from the City's in-lieu fund and a portion (18.71%) of the RDA set-aside fund may be used to assist with the purchase of additional affordable housing units over and above what the developer is required to provide and what is required by the RHNA. However, it is important to note that due to the sale of the RDA property, a decision will need to be made by the RDA in regards to the expenditure of excess surplus funds. Conversely, it is also important to note that a decision in regards to the expenditure of these funds and the City's in-lieu funds will need to be made eventually for any of the proposed project alternatives, even if the "Do Nothing" approach is selected. As such, it may be more advantageous for the City and RDA to make this decision now while there is the opportunity for a developer to meet a variety of needs.
Although Staff supports the Standard Pacific development concept, there are potential impacts and/or issues with the current proposal, such as, but not limited to density (the total amount of dwelling units proposed), geology, grading, traffic and visual/view impacts, that Staff is concerned about. Staff's support of this concept should in no way be taken as any type of approval of the concept. Rather, all of these potential impacts and issues will need to be addressed during the processing of the development applications.
Although not required, public notice of this meeting was sent to all property owners within 500' of all three Crestridge properties, and to all those on the interested parties list of the Corporation for Better Housing proposal. It was also published in the Peninsula News.
In addition to the correspondence from the interested parties described throughout this report, Staff has also received the attached correspondence from Ms. Hazel Cassell supporting the Standard Pacific proposal.
The initial fiscal impact of any of the proposals is whether or not the Crestridge property must be purchased from the City Redevelopment Agency. Any project that does not include an affordable housing element for families would necessitate reimbursement of at least $702,392, or possibly more if the fair market value of the property has increased, plus interest. If the property were to be utilized as a park, the cost of the land would likely be a charge to the General Fund Reserve. If the property is purchased from the Agency, the problem of what to do with the housing set-aside funds that are in excess of $1 million must be addressed. As was pointed out earlier in this report if there is an excess of $1 million, the City must develop a plan and expend these funds within 3 years or risk additional sanctions.
As discussed throughout this report and detailed in the Attachments, the issue of what to do with the RDA parcel is complicated. However, as noted, Staff feels that the Standard Pacific proposal may be the best option to develop both properties with a project that includes a variety of uses that meets the needs of many groups. As such, Staff recommends that the City Council:
In addition to Staff's recommendation, Staff has also identified the following additional alternative actions:
Joel Rojas, AICP
Director of Planning, Building
and Code Enforcement
Attachment 1 - Alternatives Comparison Table
Attachment 1 - Alternatives Comparison Table - is available in PDF format.
City and RDA Obligations
Pertaining to Affordable Housing
September 17, 2002
City's Housing Element Obligations:
The 1999 Regional Housing Needs Assessment provided by the Southern California Association of Governments (SCAG), and subsequently the City's General Plan Housing Element adopted in August 2001, indicate that in the current planning period (2000-2005), the following number of new housing units should be constructed in the City to meet the region's housing need:
8 very low income-housing units
5 low-income housing units
8 moderate-income housing units
31 above-moderate income housing units
53 total new housing units
There are eight affordable units planned for the Ocean Trails project, four onsite and four subsidized units offsite that are not new construction (the City is permitted to provide up to 4 of the 13 required affordable units by subsidizing existing housing stock). The four-onsite units at Ocean Trails are under construction and will need to be completed prior to opening the 18-hole golf course (estimated in June 2003). The four off-site subsidized units will need to be provided by Ocean Trails prior to the sale of lots within Vesting Tentative Tract No. 50666. Considering the 8 Ocean Trails units, of the 13 required by SCAG and identified in the City's Housing Element, 5 more new affordable units need to be constructed to meet the City RHNA numbers for the current planning period (2000-2005).
It is important to note that it is not the City's responsibility to actually develop and build these units. State law only requires that a City show that there is adequate sites for these units, that the City assist in the development of housing to meet the needs, and remove governmental constraints where appropriate and legal. The City's Housing Element currently shows that there is land available to construct these 13 units and specifically identifies the Ocean Trails project and the RDA's parcel as current projects that may be able to meet the 13-unit affordable housing need.
It is also important to note that, at this time, there are no penalties for a city not reaching its RHNA target. However, although recent legislation (SB910) that would have severely penalized cities for having a Housing Element out of compliance did not pass, Staff expects that in the future, this type of legislation may come up again and ultimately be adopted.
Redevelopment Agency Obligations:
Since the City's Redevelopment Plan was first adopted in 1984, the Redevelopment Agency has been required to set-aside twenty percent (20%) of the gross annual tax increment into the Agency’s Low and Moderate Income Housing Fund. The purpose of this Fund is to increase, improve and preserve the City’s supply of low and moderate-income housing. In carrying out the housing set-aside requirements, the Agency may expend these funds on a number of different programs, including acquiring real property. Once the unexpended and unencumbered funds in the Housing Fund exceed the greater of $1 million, the RDA has up to 1 year to either transfer the excess funds to the County or come up with a plan on how it intends on expending the excess funds. If the Agency does not transfer the funds to the County, but instead comes up with a plan, the excess funds must be spent on a program within the City within 2 years. In summary, the Agency would have a maximum of 3 years to expend excess surplus funds. If the excess surplus funds are not spent within 3 years, at 3 years, the Agency would face penalties that would affect the expenditure of other non-set-aside Agency funds.
For a number of years, Agency staff and Board members actively pursued alternatives for the use of RDA set-aside funds, including contacts with experienced developers of affordable housing projects, attempts to purchase developable land, new construction of affordable units in proposed developments and conversion of existing apartments into affordable units. In March 2000, the Agency purchased the Crestridge property for approximately $702,392 with RDA set-aside funds. At the time of purchase, the RDA set-aside fund balance was approximately $932,000. The current fund balance is approximately $618,868. Under state law, once purchased, the RDA has 5 years to initiate activities to provide affordable housing on the property. However, this could be extended for one additional 5 year period if the Agency adopts a resolution affirming its intention that the property be used for the development of affordable housing.
In October 2001, the Governor signed two bills, which make significant changes to the affordable housing requirements of the Community Redevelopment Law and affect the Agency's expenditure of funds on the Crestridge property. Both bills became effective on January 1, 2002. Basically, they add a requirement that over the duration of the Agency's implementation plan (plus an additional 5 year period), affordable housing set-aside funds shall be expended on affordable housing that is available to families with children in at least the same proportion as the population under 65 bears to the total community population. According to the 2000 Census, the City's total population is 41,145. Of that, 33,445 or 81.29% are under the age of 65, while 7,700 or 18.71% are age 65 or over. In summary, during the implementation plan period, only 18.71% of the set-aside funds may be spent on affordable housing available exclusively to senior citizens.
As such, if the Crestridge property is used for senior affordable rental housing, then the RDA could use a maximum of 18.71% of its fund towards that project. It is important to note that although only 18.71% could be used for affordable housing, in order to keep the remaining balance under $1 million, the RDA could use the remainder of the funds for a different program such as a rental write down program for non-age restricted affordable persons/families.
City's In-Lieu Affordable Housing Program:
With the adoption of the revised Development Code in May 1997, the City established several affordable housing programs. One of these, contained in Section 17.11.140, has provisions for the establishment of an in-lieu affordable housing fee to be applied to new development projects in lieu of constructing affordable housing units within the project. Currently, the City has collected $256,683 from the residential in-lieu fee housing program through the development of the Seabreeze Tract and $596,494 from the Oceanfront Estates Tract for a total current balance, plus interest, of $ 981,045.
According to State Law, the City must expend these funds within 5 years of obtaining them. However, the City has the option of extending the deadline for an additional 5 years. Since the City obtained funds from the Seabreeze tract on June 12, 1998, the City must make the necessary findings to extend the deadline by June 12, 2003. Likewise, because the City obtained funds from the Oceanfront Estates project on March 3, 2000, the City must make the necessary finding to extend the deadline by March 3, 2005 for these funds. Unlike the RDA set-aside funds, there are no requirements on what type of affordable housing program the funds should be spent on.
Additional Background Information
on Subject Properties
September 17, 2002
Description, Zoning and Existing Land Uses Along Crestridge Road
Properties on both sides of Crestridge Road have a General Plan land use designation and Zoning designation of Institutional. Some properties include both an Institutional and an Open Space Hazard land use designation. As shown on the attached aerial photograph of Crestridge Road, existing land uses on the northern side of the street, from west to east include: Hilltop Automotive, Church of Jesus Christ of Latter-Day Saints, The Canterbury, Congregation Ner Tamid, a 4.5 acre vacant parcel with current entitlements to permit the construction of Belmont's Assisted Living Facility, a privately owned un-entitled 9.77 acre vacant parcel, and the Redevelopment Agency's 19.63 acre vacant parcel located on the corner of Crestridge Road and Crenshaw Boulevard. Existing land uses on the southern side of the street, from west to east include: the Peninsula Community Church, the California Edison substation, and the Palos Verdes Art Center.
Attached are Development Code Sections 17.26 and 17.32, which describe the permitted and conditionally permitted land uses in the Institutional and Open Space Hazard Zones.
History of the two Un-entitled Vacant Parcels
The focus of this Workshop is on the two un-entitled vacant parcels located near the corner of Crestridge Road and Crenshaw Boulevard.
9.77 Acre Privately Owned Vacant Parcel:
On October 12, 2001, a development company, Standard Pacific, submitted a request for a use determination for the 9.77 acre vacant parcel located immediately adjacent to and west of the Agency owned property. The request was for a determination that senior condominiums are similar to and no more intensive than other conditionally permitted uses in the Institutional zoning district. Standard Pacific was considering purchasing the property from its current owner, Crestridge Estates llc, and pursuing an application for a 104-unit senior condominium project on the site. On October 26, 2001, the Director issued a determination that senior condominiums are not consistent with the Institutional zoning district.
19.63 Acre RDA Owned Vacant Parcel:
On August 28, 1999, the City Council and Planning Commission held a joint workshop to review the concept of a proposed Senior Affordable Housing apartment project presented by the Corporation for Better Housing. At that time, the developer requested that the City contribute up to $1.9 million of its Affordable Housing Funds towards the development of the project. At the workshop, the City Council/Planning Commission gave general direction to the Developer, and indicated that the project had some merit.
Subsequent to August 28, 1999, a development application was submitted to the City by the developer. Over the next 2 years, the application was revised several times. The initial August 28, 1999 proposal was for an 84-unit apartment building for seniors plus a 5,000 square foot Community Center for the Peninsula Seniors. All units at that time were to be reserved for low and very low-income residents. The project was subsequently revised as the Peninsula Seniors withdrew their request to be included in this project and the number of units were reduced to address some of Staff's concerns. Ultimately, a revised project was submitted that reduced the size of the project to 52 units, of which 13 were to be reserved for low and very low-income residents.
The Traffic Committee reviewed the project at their March 26, 2001, April 23, 2001, and May 31, 2001 meetings. At their May 31st meeting, the Traffic Committee recommended conditional approval of the proposed project from a traffic standpoint.
The Planning Commission reviewed the project at their March 27, 2001, May 8, 2001, May 22, 2001 and June 26, 2001 meetings. At their June 26, 2001 meeting, the Developer’s request to change the project from 52 apartment units to 40 or 42 condominium units was presented to the Commission. The Commission felt that the issue of changing the project to condominiums needed to be addressed by the City Council before the Planning Commission could take any further action on the development proposal. Subsequently, the Planning Commission tabled the item until the City Council addressed the issue of whether or not the Developer could file a Tentative Tract Map for a Condominium development.
On August 21, 2001 the RDA considered various issues pertaining to a proposal from Corporation for Better Housing and Indian Ridge Crest Gardens, LLP regarding development of the Crestridge property for Senior Housing including the approval of a new Exclusive Negotiating Agreement (ENA). The RDA decided: (1) not to approve another ENA between the Rancho Palos Verdes Redevelopment Agency and Indian Ridge Crest Gardens, LLP; (2) not to sell the property back to the developer, Indian Ridgecrest Gardens; and (3) to direct staff to consider other options for the property, including the feasibility of a park.